CU, Record-Large Win-Win Plan Shows Strong Effects... "Franchisees' Real Profits Increase"

Sales of Products with Win-Win Support Applied Up 19% Year-on-Year

Convenience store CU is introducing the positive effects of mutual growth support for franchise stores by its models.

[Asia Economy Reporter Lim Chun-han] CU announced on the 8th that its largest-ever franchisee win-win support is contributing to improved store profitability.

According to CU, the support amount per store this year increased by 15% compared to the previous year, and the total support amount also rose by 22% due to the increase in the number of stores. This win-win plan has shifted from a simple cost support method to prioritizing store competitiveness and profitability by expanding product ordering support, establishing new support funds for new product introductions, and introducing operational incentives, thereby reorganizing the support system to effectively boost actual sales.

Product ordering support provides up to 400,000 KRW per month in waste disposal subsidies for all products in 41 refrigerated categories, including not only ready-to-eat meals such as lunch boxes but also beverages, fruits, desserts, and home meal replacements (HMR). Additionally, up to 150,000 KRW per month is supported based on the rate of new product introductions. Sales of products covered by the win-win support plan increased by 19% year-on-year, which is 13 percentage points higher than the 6% growth rate of general products. By promoting increased orders of key products, their sales rose by about 5% year-on-year, and by actively encouraging the introduction of new products, which have recently become a strong sales growth driver for convenience stores, a 21% sales increase was achieved.

Actual franchisee profits are also showing an upward trend. In the case of one CU store, related sales increased through a 3.5% increase in orders for waste disposal target products and a 70% introduction rate of new products, resulting in a year-on-year profit increase of 66,000 KRW and 102,000 KRW for each item, respectively, and with additional subsidies, total profits increased by 203,000 KRW. The average increase amount across all stores is at a similar level.

A BGF Retail official stated, “The core of CU’s win-win plan is to move away from temporary and fragmented support to enhance store competitiveness and thereby increase the actual profits of franchisees,” adding, “By establishing a virtuous cycle structure through active support and investment that can inject sales growth momentum, we will demonstrate a super-gap competitiveness.”